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Franchisor Firehouse Subs Commits Fraud, Rules Federal Court

Firehouse Subs loses trademark ruling, court says company committed fraud

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A federal judge refused to disturb a jury verdict holding that Firehouse Subs had committed fraud to obtain the "Firehouse" trademark.

The judge found sufficient evidence to support the jury verdict that Firehouse had committed fraud on the US Patent and Trademark Office and that Firehouse deliberately lied to USPTO when it denied knowing of any party having superior rights in the trademark.

The judge also ordered Firehouse Subs to pay the other party's legal fees because of the fraud committed by Firehouse; Firehouse will pay the other party $241,888 in legal fees and $9,060 in costs.

The judge noted that the winning party had managed to use one attorney and one paralegal in contrast to Firehouse which used 3 lawyers and one paralegal; the judge praised the efficiency of litigation firm Turner Padget.

The ruling creates considerable uncertainty regarding the franchise, but United Capital Business Lending is standing by the franchisor. United acquired the small business portfolio of franchisee lender Butler Capital, and announced that it will provide $405,000 to Alabama franchisee Harris Restaurant Group.

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Firehouse Restaurant Group Inc et al v. Scurmont LLC et al, US District Court (SC), Oct 17, 2011

AttachmentSize
Firehouse v. Scurmont OPN 17 Oct 2011.pdf104.87 KB
Firehouse v. Scurmont JURY VERDICT 19 Aug 2011.pdf316.2 KB
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Corbin is the online pen name of a contracts aficionado who needs to get a better hobby.

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